LivaNova PLC Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by LivaNova PLC on February 14, 2018. The filing discloses a material acquisition agreement and the establishment of a new financing facility to support the transaction.
Key Financial Metrics and Transaction Details
- Acquisition Target: CardiacAssist, Inc. dba TandemLife, a provider of advanced cardiopulmonary temporary support solutions.
- Total Consideration: Up to $250 million.
- Payment Structure: Approximately $200 million upfront; up to $50 million in contingent consideration based on regulatory milestones.
- Financing Facility: A $170 million term loan bridge facility with Bank of America Merrill Lynch International Limited.
- Interest Rate: Variable based on LIBOR plus a margin ranging from 0.75% to 1.25% per annum depending on the duration.
- Facility Term: Terminates August 14, 2018, with an option to extend to February 13, 2019.
Material Changes and Outlook
The acquisition is projected to be modestly accretive to earnings in 2018. The transaction is expected to close in the first half of 2018, subject to regulatory approvals and customary closing conditions. Proceeds from the bridge facility will fund the acquisition, pay related expenses, refinance certain existing indebtedness, and support general corporate purposes.
Risks and Contingencies
- Covenants: The bridge facility requires LivaNova to maintain a maximum semi-annual leverage ratio and a minimum semi-annual interest coverage ratio.
- Contingent Consideration: Up to $50 million of the purchase price is dependent on achieving specific regulatory milestones.
- Closing Conditions: The deal is subject to approvals and other customary conditions.
Investor Verification Checklist
- Verify the closing status of the TandemLife acquisition and any regulatory hurdles encountered.
- Confirm the drawdown amount of the $170 million bridge facility and its impact on the company's leverage ratio.
- Monitor progress toward the regulatory milestones required to trigger the $50 million contingent payment.
- Review subsequent filings for details on the refinancing of existing indebtedness mentioned in the proceeds usage.